Introduction to the Product
Takata is an airbag manufacturing company. It manufactures and supplies airbags for all kinds of vehicles. The company is a B2B concern and deals with the small and big corporations in the automobile sector. The products of the company protect the people riding all types of vehicles from injuries and loss during road accidents. The business is top ranked among the companies spending on innovative systems and research and development in Japan. The operations are not confined to Japan only. It is a multinational concern now supplying the air bags systems to the other countries of the world. The product line pertinent to the air bag systems is quite diverse as they encompass the entire ambiance of the vehicle. The technology used in this kind of the system is truly sophisticated in nature. It detects any collision effect with the vehicle. As a result, the inflators installed in the systems are activated which execute the operations in reportedly .005 seconds (Tabuchi, 2016). The company manufactures a different kind of air bags which help to perform varied functions. These products are as under;
Driver Air Bags
The driver air bag is mostly installed on the steering wheel because it is the place which causes more damage to the driver during any accident. Therefore, whenever anything strikes the vehicle with the stipulated force, the mechanism gets activated, and the sensors trigger the inflator which as a result inflates the bag and cover the diver’s body. It is important to note that it is the bag which has been mostly used in the vehicles (Gu, 2003).
Passenger Air Bags
As a matter of fact, a person is less likely to drive alone. Most of the time, the driver is accompanied by some other persons. They may be one or more than one. Therefore, it was necessary to produce something for the protection of the passengers who are traveling with the driver. As discussed earlier, the driver can be protected through the airbag in the steering wheel. Engineers felt a necessity to build a bag for the passengers too. The passenger bag is located on the dashboard. Whenever something hits the vehicle, they are inflated in response. There is no denying the fact that the space between the dashboard and the passenger is more than that of the driver and the steering wheel. Hence, the bag of the passenger side is twice bigger than that of the driver (Davidson, 1996).
Side Airbags
As a matter of fact, a vehicle can be hit from any side. Therefore, installing the air bags on the dashboard or the driver’s steering wheel was not enough. Engineers from the world mull over the problem and came to a successful solution that the air bags on sides should also be installed to eliminate the chances of damage. Since such bags are planted in the door panels, they help to minimize the abdomen and thorax injuries of a passenger. It is important to note that the inflating speed of this type of bag is more than the other ones (Davidson, 1996).
Curtain Airbags
The companies think beyond as they take into account every aspect while manufacturing anything. Concerning the air bags mechanism, have manufactured airbags which help to protect abdomen, face, and thorax. However, now they have developed a new air bag which also serves to protect the head injuries duration the collision of the vehicle. Such kind of bag is installed in the headliner or may be the upper side of the window. How surprising is the fact that when a vehicle rolls down, it helps to protect the head of the passenger. Therefore, curtain airbags may be required to be inflated for several minutes as they are very important by keeping in view the contemporary traffic conditions (Pender, 2001).
Knee Airbags
After covering the upper parts of the body, the researcher had to think about the protection of the lower part. They came to the conclusion that the knees are the main vulnerable are of the lower body. Hence, it should also be protected with the same strategy. They devised knee airbags which help to protect the knee during a collision with the vehicle. Knee airbags are planted in the lower portion of the vehicle which may be directly in front of the knee of the passenger. Whenever a vehicle is hit, the air knee bags are inflated to cover the space between the knee and the other area (Davidson, 1996).
Motorcycle Airbags
Despite devising the airbags for the bigger vehicles, engineers also thought about making something like this for the two-wheeler vehicles. Consequently, they came to develop the airbags for the motorcycles which are mostly installed on the fuel tank or may be on the handle. It is not as effective as car’s bag, but it helps to minimize the chance of injuries which could happen due to the collision with another vehicle or the road. It is important to note that bags installed in the motorcycle are bigger than that of cars or other vehicles (Davidson, 1996).
Problem Area
The main problem is with the sudden opening of the air bags. They inflate with a substantial force that blows the metal apart and causes great damage to the driver and the passengers. This dramatic over inflation of the air bags has become the norm of the day, and the risk management team of the Takata Company are not seemingly paying attention to the outstanding problem. This thing has caused more than six deaths and more than one hundred injuries across the world. The automobile company is focusing on the repairing of the air bag systems rather de-rooting the problem from its origin (Tabuchi, 2016). They are doing it in the areas where there is more humidity climate as they are of the view that keeping the bags in the humid environment for a longer time can cause the problem. They should have laid some more emphasis on its basic mechanism and devise a new one.
Automakers Involved
Takata is airbag manufacturing company which supplies airbags to other automobile companies which produce vehicles of different kinds. According to some fact and figures, mostly Honda is using Takata airbags in its vehicles. In addition to it, some other automobile manufacturers are also involved in this business as BMW, Chrysler, Ford, General Motors, Mazda, Mitsubishi, Nissan, Subaru and Toyota. Cars of these models above are also affected by this airbag inflation problem. Takata was the main supplier of airbags to all the companies after it fell prey to the air bag problem. Many automobile companies have changed their supplier’s course and found new avenues to invest. According to the reports of the Reuters, it became known that Honda is the biggest client of the Takata Company and also greatly affected by its airbag faults (Lippert, 2015).
The report continues to say that the executive officials of Honda Company are also thinking about changing their suppliers to maintain their stake in the market. In addition to it, they have also changed their supplier at some places from Takata to Daicel Corp. and getting its supplies from it. It was evident that the problematic company first needs to take care of its recalls (Lippert, 2015).
Vulnerability of Air Bags
The main problem with the air bags is in their inflation system. When they started to inflate, they do it for more than the stipulated period. As a result, they cause a heavy blow and affect the passengers sitting in the vehicle. In addition to it, it also spreads some metal pieces around which also cause great damage to the people traveling in the vehicle. According to some reports, approximately more than thirty-four million vehicles are affected by this issue in the United States alone. Another seven million incidents have been reported from the rest of the world (Pender, 2001).
As a matter of fact, the company is unable to reach the solution of the problem rather it is paying it full attention to the repairs of the system. They must know that system can be repaired, but a dead man cannot be taken back alive. So far, they have come to know that the problem is occurring is due to the excessive humidity in the air. Therefore, they are going for repairs in the areas where there is more humidity problem in the climate. There is no denying the fact that many recalls from the whole world have drawn the attention of the company. They still are not doing what they should do. If I am tasked with finding out the solution to the problem, I will change the very mechanism of the air bags systems (Ma and Hagiwara, 2016).
The company should call its risk management team and ask him to eliminate it by taking remedial measures. Therefore, this kind of incidents must not occur again because the life of the people is in the hands of the company. As far as I have analyzed the issue, the problem is not the material used to manufacture bags but with the functions of the material. The whole material is defectively processed and set on the steering wheel and other places of the vehicle (Miller, 1992).
Takata and the Issue
Engineers of Takata Company came to know that the inflators were not sealed in a right manner because the planters of the air bags were not capable of doing so. Moreover, it also stated that the company is also using the defective and wrong types of steel tubs while manufacturing the bags. Takata Company decided to make its inspections sharp in a bid to address the problem due to the millions of incidents which continue to occur in the world. The supervisor of the Takata Company reportedly said that we are at a loss in fulfilling our mission. They also established that the accidents are also occurring owing to the excessive humidity in the atmosphere. Therefore, the accidents are occurring more in the Florida and the California where the atmosphere is quite hot and filled with humidity. Under National Highway Traffic Safety Administration rules, there are no distributors who are to report about the quality control issue. The National highway traffic safety administration does not depend upon the suppliers and distributors but on the automobile manufacturers. The latter has the responsibility to report about the defects that serve to pose a risk the safety of the people (White & Lienert, 2015).
Takata and Quality Control
In the past engineers working on the plant strived to find out the range of issue occurring in the air bag system. By doing so, they came to know that the problem is occurring due to the massive rust in the mechanism. They could have caused the inflators to function in the very wrong manner (Raz, Shenhar and Dvir, 2002). In a reported issued in 2003, it was reported that there are 60 to 80 defects that are being recorded in every one million inflators shipped to it automobile clients. It is important to note that the engineers of the company have tried many times to address the problem in the right manner. In another report, it was said that a chewing gum has been found in the inflator which could be mistakenly left while manufacturing the air bag system. This array of incidents triggered a probe into the matter which says that the National Highway traffic safety administration is also involved in the matter (Lienert, 2015).
Recall Cost
According to auto-safety experts, the main cost of replacing a defective air bag inflator is around 100 dollars or maybe sometimes 150 dollars. So far, this kind of costs is born by the automobile manufacturers and the air bag producers jointly. As the recall rises, it triggers new discussions over the skyrocketing costs of the excessive recall. Representatives from the companies decided to split them and focused is paid on the Takata’s defective inflator systems which have caused these incidents more in number. The intangible cost of the Takata is more in volume. The rival of the company Autoliv is aiming to boost in research and development spending which is more than it commercial rival in the market. On the other hand, Takata’s cash flow process is getting down with each passing day. It sales in March were nearly 75.7 yen which is equal to six hundred and twenty-four million. The amount is down from the one hundred and five billion. The cash flow process of the company is very tight and cannot be recovered soon (Weir and Hurford, 1999).
It is reported that it may need the bank support to further its operations. There is no denying the fact that the recall expenses also include the production of the new parts recalled, repaying to the car occupants, dealer. According to a forecast, the company is more likely to proliferate its expenses in the years to come. In addition to it, the company is also losing it clients with each passing day. According to a report, Honda has already moved some of its business to a new rival Daicel Corp. An executive official from Honda also reported that the Honda is considering over whether to buy from the Takata Company or not. In addition to the financial costs, the company is also paying the social cost. According to the reports of Reuters, More than 16 million vehicles have recalled for repairing or some other issue across the globe. The defective air bags have also caused many deaths in the United States as according to the police, medical and automaker officials (Lippert, 2015).
Cost of Innovation
It is the main are to be focused. As discussed earlier, the company is facing massive expenses regarding repairing the inflators. According to some reports, more than thirty-four million recalls have been reported across the globe. The problem with the company was that it mainly laid its emphasis on repairing the defective and blown air bags. This way, the expense could only mount up with each passing day. On the other hand, changing the whole mechanism of the production of airbag systems could be better than the former practice. The company has born massive cost to cater the recalls which continued to mount up gradually (Olson and Wu, 2008).
Evaluation
The epicenter of the problem lied at the environmental conditions. The company was not focusing on devising a new technology, but it laid more emphasis on repairing the recalls which as a result cause a profound loss to the company in tangible and intangible manner. When they were producing the air bags, they started to get the recalls at a very faster pace. They should have spent more money on the research and development department of their company. They could have invited the more engineers to form the other companies to devise the new technology. As a matter of fact, many accidents occurred due the humidity on the environment which caused the inflators to blow with great force (Joanna, 2014).
The engineers must have invented a new technology which could sustain in an environment filled with excessive humidity. Another reason of the inflator’s uncontrolled blow was the rust developed in the air bags systems. Now again the problem is due to the environmental conditions. Takata should have stopped supplying for a certain period and paid its focus on producing something new and sustainable (Bailey et al, 2000).
Enterprise Risk Management
Enterprise risk management is a process of directing the activities inside the organization in a bid to minimize different risks. It includes assessing the operational risks, monitoring their magnitude and impact to the organizational performance, finding opportunities to solve the problem and devising strategies to alleviate them. By going through this process in a proactive manner, one can easily create value for its customers and other stakeholders inside and outside the company. If the company had focused on the risk management mechanism, it would have easily evaded the problem. The company, instead of identifying the areas of risk, paid its attention to catering the recalls coming from the globe. The money which had been spent on repairing or payment to the customers and automobiles could have been spent on something else. They must have formulated a new team manned with risk control managers and other engineers who have been involved in innovation. This team should have been tasked to find out the risk areas and new, innovative, effective efficient strategies to address the problem. In the mean of the recalls, they could work on the development of a new technology which can help eliminating the problem forever. The team should have analyzed the origins of the main problem which was mainly the humidity problem in the atmosphere. They should have invented new airbags which could sustain the environment filled with excessive humidity of Florida and California. They must have tested this kind of bags in the same environment to ensure its quality. It was the mistake the Takata Company had done while dealing with this matter. Managing risk is as important as manufacturing and selling a product in the market. Therefore, a company should first look at its potential risks before pushing their product in the market and to eliminate the risks of lives and the material (D’Arcy & Brogan, 2001). Takata was mistakenly paying its entire focus on the recalls and it’s repairing business all over the world. It must have detected such kind of risks before installing the air bags into a vehicle. There is the standard quality norm that a product is checked in every rough and tough situation to alleviate the possible risks in the manufacturing of a product. If the Takata Company had done so, it would not have got such a problem. The main issue of the company revolves around its inability to do strategic planning. It only took into account what is at hand and the companies are successful which do their current work for a better tomorrow.
References
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